It’s been a while since I’ve written specifically about personal finance on the blog, mostly because my focus shifted to earning more income.
However, this week I’m going back to my roots thanks to Hurricane Irma. For those of you who may not know, I live in Miami and the last couple of weeks have been insane. Fortunately, Irma wasn’t as bad for Miami as it could have been, but it’s been enough of a disruptor to throw us all for a loop.
Between evacuating my apartment (the one I just moved to in July), the storm itself and now the aftermath, I’m extra grateful for emergency savings. Here are three ways my emergency fund is saving my ass this month as well as some ways to you can start your own emergency cash cushion.
I could take time off work to prepare for the storm.
When you work for someone else, you have to wait until they tell you not to come in to prepare for a hurricane. If your employer has a soul, they hopefully give you plenty of time. Sadly, so much stuff is always up in the air with hurricanes. Is it coming? Is it not coming? Which coast is it hitting? Will it be bad? That means a lot of people wait until the danger is obvious to prepare for a storm.
The upside of being self-employed is I’m the boss. I decide when to stop working. This came in handy because, as I already mentioned, I had to evacuate. Not only that, but I needed to help my parents board up two properties and keep an eye on my grandmother so they could prepare for the storm as well.
Because I have emergency savings, I don’t feel the crunch to continue working in case I can’t pay my bills. It means I can focus on what’s important – making sure my family and I are safe.
This brings me to my next point…
My bills are paid even if I can’t actually work.
The downside of being self-employed is if I’m not working, I’m not getting paid. While I’ve built some passive streams of income which gives me enough each month for groceries, they don’t cover all the bills yet.
Having a hefty emergency fund means I can pay my bills even though my work flow has been disrupted by a natural disaster. Hopefully, I won’t have to use it, but I have peace of mind knowing it’s there.
For those of you who are reading and thinking “Well, I won’t be out of work because of a hurricane so I’m good”, think again. It doesn’t take a natural disaster to be out of work. You could get laid off, have a slow month in your business, experience some sort of other emergency, get derailed by needing to get your car fixed, etc.
The truth is it doesn’t take much to be met with unexpected circumstances that disrupt your work flow or your finances.
Cash on hand.
Here’s the thing about hurricanes: you need to have cash on hand.
According to the news, more than 15 million people lost power in Florida. Guess what happens when more than half the state loses power? ATMs and point of sale systems don’t work. That means cash is king.
Having emergency savings allowed me to take out cash should I need it after the storm. Sure enough, the only open grocery store in my area after the storm could only accept cash.
Fortunately, I didn’t have to use my stash of emergency cash this time, but I now have it socked away for the next time I’ll need emergency money in cash. After all, hurricane season doesn’t end until November 30th.
How to Start Saving for Emergencies
If you don’t have emergency savings, it’s not too late to get started. Here are some ways you can start saving for emergencies.
- Sell some of your unwanted stuff online.
- Start a side hustle. Back when I was still working for other people, freelance writing supplied me with extra money for emergency savings.
- Create a savings account for emergencies and set up automatic deposits from your checking account.
- Use apps to help you save automatically. I’m personally loving Qapital as of late. It’s free and easy to set up. I logged into my account before the storm and was happy to see I have almost $300 that’s been saved over time without my even noticing. Click here to sign up via my referral link and we each get $5.
Experts say we should have three to six months worth of emergency savings stashed away in the bank. While this may seem daunting, the important thing is to just start.
Trust me, part of the reason I’m not as stressed as I could be after Irma is because I know I have money in the bank for this kind of stuff.